INCOME TAX OFFICER, WARD-1, SRIKAKULAM V. MURALI KRISHNA YERUPALLY, SRIKAKULAM

MA 26/VIZ/2023

AI Insights

The case involves a Miscellaneous Application (MA No. 26/Viz/2023) filed by the Income Tax Officer, Ward-1, Srikakulam, against Murali Krishna Yerupally, challenging the Tribunal's earlier decision in ITA No. 152/Viz/2022. The original appeal was dismissed by the Tribunal due to the tax effect being below the monetary limit of Rs. 50 lakhs as prescribed by CBDT Circular No. 17/2019. The Revenue sought to recall the Tribunal's order, arguing that the case falls under an exception in the Circular related to constitutional challenges to the Income Tax Act. However, the Tribunal found that the Revenue did not substantiate their claim that the constitutional validity of the Act was under challenge in this case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128477 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 23-04-2023
• Other Referred Cases: Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 263 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect
• Section: 69A

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम SMC पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER M.A. No. 26/Viz/2023 (In आयकर अपील सं./ I.T.A. No.152/Viz/2022) (Ǔनधा[रण वष[ / Assessment Year : 2017-18) Income Tax Officer, Ward-1, Srikakulam. Vs. Murali Krishna Yerupally, Head Constable (HY-1542), Kasibugga Police Station, Palasa, Srikakulam. AEMPY 9383 C (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Smt. A. Aruna Ĥ×याथȸ कȧ ओर से / Respondent by : Sri ON Hari Prasada Rao, Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 23/06/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 07/08/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : This Miscellaneous Application is filed by the Revenue seeking recalling of the Tribunal’s order in ITA No. 152/Viz/2022 (AY-2017-18), dated 21/12/2022. 2 2. At the outset, the Ld. Department Representative submitted that the appeal of the Revenue in ITA No. 152/Viz/2022 (AY 2017-18) was dismissed by the Tribunal on the ground that the tax effect involved in this appeal is below Rs. 50 lakhs and relied on the Central Board of Direct Taxes [CBDT] Circular No. 17/2019, dated 8/8/2019 while dismissing the Revenue’s appeal. The Ld. DR further submitted that in para-2 of the Tribunal’s order (supra), the Hon’ble Tribunal has granted liber ty to the Revenue to file MA to recall the order, if the tax effect involved in the appeal is more than the monetary limit prescribed as per the Board’s Circular or the case is covered by any of the exceptions in the said Circular. Taking cue of this observation of the Hon’ble Tribunal, the Ld DR drawn my attention to the Ground No.6 of the original Grounds of Appeal raised by the Revenue in its main appeal and read out the same which is as follows: “6. Besides the merits in fac ts and law, it is also submitted that the constitutions validity of the provisions of the Inco me Tax Act is under challenge. Therefore, the case is covered in exceptional clause (a) of para 10 of the CBDT Circular No. 3/2018 dated 20/08/2018.” 3. Stating the above, the Ld. DR submitted that since in the case on hand the Constitutional validity of the provisions of 3 Income Tax Act is under challenge, this case is covered under the Exceptional Clause (a) of Para 10 of the CBDT Circular No. 3/2018, dated 20/08/2018 and therefore the order of the Tribunal may be recalled. The Ld. DR has also relied on the decision of the Hon’ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd. v. State of Kerala reported in [1966] 60 ITR 263 (SC). The Ld. DR further submitted that the Ld. CIT(A) has erred in deciding the amended provisions of section 115BBE of the Act by stating that these provisions would not be applicable to the addition made by the Ld. AO U/s. 69A of the Act. Ld. DR therefore pleaded that to this extent, there is a mistake apparent from the order of the Hon’ble Tribunal dated 21/12/2022 (supra) and hence the order passed by the Tribunal may be recalled and the appeal of the Revenue may be allowed. 4. On the other hand, Ld. Authorized Representative strongly relied on the order of the Tribunal and supported the decision taken by Ld. CIT(A). 5. I have heard both the parties and perused the material available on record as well as the orders of the Ld. Revenue Authorities and also the order of the Tribunal in the ITA No. 4 152/Viz/2023 (AY 2017-18), dated 21/12/2022. It is a fact that the tax effect involved in the appeal filed by the Revenue is below Rs. 50 lakhs and therefore the applicability of the CBDT Circular No. 17/2019, dated 8/8/2019 is not disputed by the Revenue. The contention of the Ld. DR is that the case of the Revenue falls under the Exceptional Clause (a) of Para 10 of the CBDT Circular No.3/2018, dated 20/08/2018. For the sake of reference, the Exceptional Clause (a) of Para 10 of the CBDT Circular is extracted herein below for reference: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) ..... (c) ...... (d) ......” 6. From the above it is apparent that, in any case where the Constitutional validity of the provisions of the Act or Rule is under challenge, then the monetary limits specified by the CBDT in its Circular (supra) to give tax effect would not come into play. In the present case, the Revenue has not furnished any evidence or brought to my notice to prove that the decision of the Ld. 5 CIT(A) or the issues involved in the Revenue’s Appeal are under challenge before any Constitutional Courts with reference to the Constitutional validity of the provisions of the Act or Rule relatable to the Revenue’s appeal (ITA No. 152/Viz/2022). Further, I am of the considered view that the onus is on the Revenue to establish that how the case falls under the Exceptional Clause (a) of Para 10 of the Board’s Circular (supra) and they should prove that the issues involved in the appeal or the decision of the Ld. CIT (A) is challenged with reference to the Constitutional validity of the provisions of the Income Tax Act, 1961 or the Rules before any Constitutional Judicial Forums. In the absence of the same, merely stating that since this case falls under the Exceptional Clause (a) of Para 10 of the CBDT Circular No. 3/2018, dated 20/08/2018 and therefore the order of the Tribunal needs to be recalled does not have any merit. From the above observations, I have no hesitation to come to a conclusion that since the tax effect involved in the Revenue’s appeal is below Rs. 50 lakhs, the application of Board’s Circular No. 17/2019, dated 8/8/2019 by the Tribunal while dismissing the Revenue’s is appropriate and hence I find no mistake apparent in the order of the Tribunal (supra). Accordingly, the Miscellaneous Application filed by the Revenue is dismissed. 6 7. In the result, Miscellaneous Application filed by the Revenue is dismissed. Pronounced in the open Court on 07 th August, 2023. Sd/- (दुåवूǽ आर.एल रेɬडी) (DUVVURU RL REDDY) ÛयाǓयकसदèय/JUDICIAL MEMBER Dated :07/08/2023 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee – Shri Murali Krishna Yerupally, Head Constable (HY-1542), Kasibugga Police Station, Srikakulam. 2. राजèव/The Revenue – Income Tax Officer, Ward-1, Srikakulam. 3. The Principal Commissioner of Income Tax, 4.आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam